great stock, page-4

"but ain't that just how things are?"

An insurance company can make much more profit by reducing its GWP (or sales) as it will result in lower claims being paid out, depending on the cycle its operating in. However, investors who only care about GWP growth over pcp would hammer a stock if it does fall short of guidance. IAG management just try to promote this (hence the expansion into overseas markets) - following on herd behaviour to expand and grow in good times, as they did. And failed.

Take great insurance companies. Think QBE, Geico, White Mountains...and they will have no trouble in communicating lower GWP (writing policies that dont make economic sense) in a soft market. Their investors understand.